Strategy, Execution and Operational Excellence
What is a strategy? Where do you separate strategy from execution? What value does Operational Excellence offer? Why does any of this matter?
Quite simply, strategy is a decision about who you wish to serve, how you wish to serve them so as to deliver value and what capabilities are needed to succeed. Answering these questions provides the guidelines by which to allocate resources.
On the other hand, execution takes your strategic decisions and converts them into a vision, mission and operational plans. If you’re a regular reader of our blog, you’ll know we connect operational plans from each functional area to improvement projects by using core value streams. Identified performance gaps in the value streams are the building blocks of an Operational Excellence effort.
Why are these distinctions important? Describing vision, mission, operational plans and operational excellence activities as strategies confuses the journey with the destination. That mistake ensures you’ll never arrive anywhere. It also strips away the value of helping a client choose the means by which to execute a strategy. Putting the cart ahead of the horse, yields both a useless cart and useless horse.
I tell prospects, clients and partners; we’re here to help execute on strategies but we assume those strategies are in place. One of our value propositions to our clients is that we will develop a governance map from a top level scorecard at the highest point to the deepest sub-processes at which improvement opportunities reside. There we specify business improvement cases and projects. However, we expect the client to choose and weight the criteria by which to prioritize the projects for execution so we can allocate resources such as budget and personnel.
It is the choosing and weighting of criteria for project ranking that tells me if a company has a clear strategy. As previously stated, a strategy specifies what customers a company wishes to serve, how it wishes to serve them to deliver value and what capabilities are needed. These decisions provide the guidelines by which to allocate resources. When a company has a very difficult time ranking and rating projects, much less being consistent over time, it is clear they don’t have a clear strategy that is understood by everyone.
When a company doesn’t have a clear strategy, improvement initiatives run into common problems. The company develops a long list of projects but they are all equally critical. People work on many projects spending a little time on each and never getting any of them done.
If you’d like to discuss, feel free to contact me